Google sues to block state AG Jim Hood’s probe

December 19, 2014, 4:42 PM UTC
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MOUNTAIN VIEW, CA - JANUARY 30: A sign is posted on the exterior of Google headquarters on January 30, 2014 in Mountain View, California. Google reported a 17 percent rise in fourth quarter earnings with profits of $3.38 billion, or $9.90 a share compared to $2.9 billion, or $8.62 per share one year ago. (Photo by Justin Sullivan/Getty Images)
Photograph by Justin Sullivan — Getty Images

Google filed suit in federal court in Jackson, Mississippi, this morning to block a probe being led by state attorney general Jim Hood, alleging that he’s treading in areas controlled and preempted by federal law.

“Congress broadly immunized interactive computer service providers from state regulation for displaying information created by others,” write the search giant’s lawyers.

Yet for the last 18 months, they allege, Hood “has threatened to prosecute, sue, or investigate Google (GOOG) unless it agrees to block from its search engine, YouTube video-sharing site, and advertising systems, third-party content (i.e., websites, videos, or ads not created by Google) that the Attorney General deems objectionable.”

Hood was not immediately available for comment—we will append his comments when received. [On Friday afternoon attorney general Hood responded to Google’s suit with a 2-page statement to which we also link in its entirety at the bottom of this article. In it he says that “I am calling a time out, so that cooler heads may prevail. I will reach out to legal counsel Google’s board of directors to negotiate a peaceful resolution of the issues affecting consumers ….”]. But he has asserted that his office has probable cause to believe that Google is violating the Mississippi Consumer Protection Act, and served Google with a broad 79-page document subpoena last October. The responses will be due in January, unless Google wins the temporary restraining order it is seeking in today’s suit.

In a letter to Google last November, Hood wrote that “overwhelming evidence shows that Google facilitates and profits from numerous illegal online activities ranging from piracy to illegal drug sales and human trafficking.”

He cited, for instance, the fact that in August 2011 Google entered into a nonprosecution agreement with federal prosecutors and agreed to forfeit $500 million for “allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States,” as a Justice Department press release described the deal.

Google maintains, however, that the Communications Decency Act of 1996, which regulates the behavior of Internet publishers and search engines, as well as other federal laws relating to copyright and drug importation, are meant to preempt the field into which Hood is intruding. According to Google’s petition, in July 2013 Hood and 45 other state attorneys general “acknowledged in a letter to Congressional leaders that “federal law prevents State and local law enforcement agencies from prosecuting” Internet platforms.

“The Attorney General has demanded in several meetings,” continue Google’s lawyers, led by Jamie Gorelick at Washington, D.C.’s Wilmer Hale and Fred Krutz of Jackson’s Forman Watkins Krutz & Tardy, “that Google pre-screen or block third-party content and search results that merely may involve illegal activity, even at the cost of burdening lawful, protected speech. He has even sought a ‘24-hour link through which attorneys general’ can request that links to particular websites be removed from search results ‘within hours,’ presumably without judicial review or an opportunity for the target websites to be heard.”

In fact, according to the suit, Google has “created a custom reporting tool” for Hood to use to seek expedited removal of YouTube videos he finds objectionable, but he’s used it only seven times, the suit says. This amounts to less than 0.000004% of the YouTube videos Google took down in 2014 following its ordinary policies and procedures, the suit alleges.

In footnotes, Google also suggests that Hood is doing the bidding of the Motion Picture Association of America, which it claims has helped draft letters and other documents.

In a blogpost on its site Thursday, Google general counsel Kent Walker characterized the assistance the MPAA has given Hood and a few other state attorneys general as a “secret, coordinated campaign to revive the failed SOPA legislation by other means.” (The Stop Online Piracy Act was legislation proposed in late 2011 that would have permitted companies to petition the Justice Department to seek court orders requiring ISPs to block customers from reaching particularly egregious foreign-based, rogue sites. In January 2012, after hundreds of web sites, including Google, posted anti-SOPA political messages on their home pages, and invited the public to inundate congressmen with calls and emails, the bills were abandoned.)

Kate Bedingfield, a spokesperson for the MPAA—whose members include Walt Disney Company (DIS), Paramount Pictures (VIA), Sony Pictures (SNE), 21st Century Fox (FOX), Universal (CMCSA), and Warner Brothers (TWX)—said this: “our primary objective is to protect our members and their creative works—employing voluntary initiatives, policy solutions and legal actions. When wrongdoing is taking place online, we work with and support appropriate law enforcement officials, including the Attorneys General, as do many other industries.”

As for Walker’s blogpost, Bedingfield added, “Google’s blog post today is a transparent attempt to deflect focus from its own conduct and to shift attention from legitimate and important ongoing investigations by state attorneys general into the role of Google Search in enabling and facilitating illegal conduct – including illicit drug purchases, human trafficking and fraudulent documents as well as theft of intellectual property. We will seek the assistance of any and all government agencies, whether federal, state or local, to protect the rights of all involved in creative activities.”

Google has suspected since at least November 2013 that Hood’s investigation enjoyed significant assisstance from the MPAA. As reported by the New York Times earlier this week, Hood provided Google a 10-page, single-space electronic letter, written in Word Document, that revealed on its face, if one simply clicked on “file” and then clicked on “properties,” that it had been written on the computer of a lawyer at Jenner & Block, one of the MPAA’s outside counsel.

Its suspicions were exacerbated when The Verge reported that stolen emails, disclosed in the recent mammoth computer hack of Sony Pictures, showed that the MPAA was coordinating a campaign against “Goliath,” which appeared to be a codename for Google. The New York Times and Huffington Post then reported additional evidence of such a campaign earlier this week, based both on freedom of information act requests and stolen emails from the Sony hack.

The MPAA and Hood are strange bedfellows. Hood has often worked closely in the past with contingent-fee plaintiffs lawyers, prompting the ire of the Chamber of Commerce’s Institute for Legal Reform, for instance here (pages 11-14) and here (page 96).

I wrote about Hood in 2008, when he teamed up with plaintiffs lawyers Dickie Scruggs to mount a multi-pronged legal assault on State Farm in the wake of Hurricane Katrina. (Scruggs later went to prison for bribing two state judges. He was released earlier this year.)

Correction: An earlier version of this article incorrectly rendered the name of Fred Krutz’s law firm. The correct name, as the text now reflects, is Forman Watkins Krutz & Tardy. I regret the error.

Statement of attorney general Jim Hood in response to Google’s suit.

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